Postwar Japanese Trade Policy: A Shift from Multilateral GATT/WTO to Bilateral/Regional FTA Regimes

Abstract

In the 70 years since the end of World War II (WWII), the Japanese economy and the international economic environment have changed greatly. The Japanese economy recovered from wartime destruction, and from the latter half of the 1950s through the 1970s, achieved high levels of growth, which enabled Japan to join the group of advanced countries. In the 1970s, economic growth slowed as a result of the oil shocks of 1974 and 1978, but the efforts of Japanese business to raise productivity were effective in promoting economic recovery in the early 1980s. Although the economic momentum of the 1980s was such that it looked as if Japan might surpass the world’s largest economy, the United States, the bubble burst in the early 1990s and the tide turned, leading to an unprecedented economic downturn. The 1990s saw low growth leading to the so-called ‘lost decade’. Amid a recovering global economy in the early 21st century, the Japanese economy also moved into a growth phase. However, the global financial crisis sparked by the Lehman shock in 2008 followed by the Great East Japan Earthquake and nuclear power plant accident in 2011 once again precipitated a downward trend in Japanese economic growth.